Question 1

If a firm is producing the level of output at which short-run average cost equals long-run average cost,then

Accepted Answer

A) the firm has chosen the cost-minimizing combination of inputs to produce this level of output. 
B) with a fixed amount of capital,short-run average cost is greater than long-run average cost at any other level of output. 
C) the firm has chosen the profit-maximizing level of output. 
D) both a and b 
E) all of the above 
A) the firm has chosen the cost-minimizing combination of inputs to produce this level of output. 
B) with a fixed amount of capital,short-run average cost is greater than long-run average cost at any other level of output. 
C) the firm has chosen the profit-maximizing level of output. 
D) both a and b 
E) all of the above

Question 2

In the following graph,the price of labor is $15 per unit.How many units of labor should a firm use to produce 2,000 units of output at the least cost?

Accepted Answer

A) 40 
B) 50 
C) 80 
D) 100 
E) none of the above 
A) 40 
B) 50 
C) 80 
D) 100 
E) none of the above

Question 3

Refer to the following graph.The price of labor is $3 per unit:   How many units of capital should a firm use in order to produce 300 units of output at the least cost?

Accepted Answer

A) 17 units of capital 
B) 18 units of capital 
C) 19 units of capital 
D) 20 units of capital 
A) 17 units of capital 
B) 18 units of capital 
C) 19 units of capital 
D) 20 units of capital

Question 4

Refer to the following figure.The price of capital is $50 per unit:   What is the minimum cost of producing 1,200 units of output?

Accepted Answer

A) $7,000 
B) $8,000 
C) $9,000 
D) $10,000 
E) $11,000 
A) $7,000 
B) $8,000 
C) $9,000 
D) $10,000 
E) $11,000

Question 5

In the graph below,the price of capital is $500 per unit.How many units of labor should a firm use in order to produce 30,000 units of output at the lowest possible cost?

Accepted Answer

A) 300 units of labor 
B) 320 units of labor 
C) 500 units of labor 
D) 800 units of labor 
E) none of the above 
A) 300 units of labor 
B) 320 units of labor 
C) 500 units of labor 
D) 800 units of labor 
E) none of the above

Question 6

If a firm is producing the level of output at which long-run average cost equals long-run marginal cost,then

Accepted Answer

A) long-run marginal cost is at its minimum point. 
B) long-run average cost is at its minimum point. 
C) long-run total cost is at its minimum point. 
D) both a and b 
E) all of the above 
A) long-run marginal cost is at its minimum point. 
B) long-run average cost is at its minimum point. 
C) long-run total cost is at its minimum point. 
D) both a and b 
E) all of the above

Question 7

Refer to the following graph.The price of capital r)is $20.   At the optimal combination of inputs for producing 14,000 units of output,what is the marginal rate of technical substitution?

Accepted Answer

A) 2.5 
B) 0.67 
C) 1.5 
D) 0.80 
E) impossible to tell from the graph 
A) 2.5 
B) 0.67 
C) 1.5 
D) 0.80 
E) impossible to tell from the graph

Question 8

If the price of labor rises relative to the price of capital,the cost-minimizing ratio of capital usage to labor usage i.e.,the ratio K/L)will

Accepted Answer

A) increase. 
B) be unchanged. 
C) decrease. 
D) cannot determine without more information 
A) increase. 
B) be unchanged. 
C) decrease. 
D) cannot determine without more information

Question 9

Refer to the following figure.The price of capital is $50 per unit:   Which of the following combinations of capital and labor lies on the expansion path?

Accepted Answer

A) 110K,120L 
B) 60K,120L 
C) 130K,200L 
D) 130K,175L 
A) 110K,120L 
B) 60K,120L 
C) 130K,200L 
D) 130K,175L

If a firm is producing the level of output at which short-run average cost equals long-run average cost,then

In the following graph,the price of labor is $15 per unit.How many units of labor should a firm use to produce 2,000 units of output at the least cost?

Refer to the following graph.The price of labor is $3 per unit: How many units of capital should a firm use in order to produce 300 units of output at the least cost?

Refer to the following figure.The price of capital is $50 per unit: What is the minimum cost of producing 1,200 units of output?

In the graph below,the price of capital is $500 per unit.How many units of labor should a firm use in order to produce 30,000 units of output at the lowest possible cost?

If a firm is producing the level of output at which long-run average cost equals long-run marginal cost,then

Refer to the following graph.The price of capital r)is $20. At the optimal combination of inputs for producing 14,000 units of output,what is the marginal rate of technical substitution?

If the price of labor rises relative to the price of capital,the cost-minimizing ratio of capital usage to labor usage i.e.,the ratio K/L)will

Refer to the following figure.The price of capital is $50 per unit: Which of the following combinations of capital and labor lies on the expansion path?

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 9: Production and Cost in the Long Run

If a firm is producing the level of output at which short-run average cost equals long-run average cost,then

In the following graph,the price of labor is $15 per unit.How many units of labor should a firm use to produce 2,000 units of output at the least cost?

Refer to the following graph.The price of labor is $3 per unit: How many units of capital should a firm use in order to produce 300 units of output at the least cost?

Refer to the following figure.The price of capital is $50 per unit: What is the minimum cost of producing 1,200 units of output?

In the graph below,the price of capital is $500 per unit.How many units of labor should a firm use in order to produce 30,000 units of output at the lowest possible cost?

If a firm is producing the level of output at which long-run average cost equals long-run marginal cost,then

Refer to the following graph.The price of capital r)is $20. At the optimal combination of inputs for producing 14,000 units of output,what is the marginal rate of technical substitution?

If the price of labor rises relative to the price of capital,the cost-minimizing ratio of capital usage to labor usage i.e.,the ratio K/L)will

Refer to the following figure.The price of capital is $50 per unit: Which of the following combinations of capital and labor lies on the expansion path?

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters